SB 827 may have been great economics, but it was poor politics.
The recent defeat of SB 827—California State Senator Scott Wiener’s bill that would have legalized apartment construction in area’s well served by transit—was the subject of a thoughtful post-mortem in the Los Angeles Times: “A major California housing bill failed after opposition from the low-income residents it aimed to help. Here’s how it went wrong.” Liam Dillon notes that while the bill had the strong support of YIMBY (Yes In My Backyard) housing advocates, it foundered because of the combined opposition of not only local governments and homeowners, but also the very people it was supposed to help: low-income renters.
Dillon points out the schism between the economic and political cases for the legislation. SB 827 may have been great economics, but it was poor politics. YIMBYs and a wide range of urban and housing scholars supported the SB 827 approach, arguing that more housing, especially in transit-served locations, would lower rents and reduce displacement.
“The reality is that the heart of displacement is a lack of housing, which pours lighter fluid on housing costs, puts huge pressure particularly on low-income tenants and pushes people out,” [Senator Scott Wiener] said. Research from the state’s nonpartisan Legislative Analyst’s Office and UC Berkeley has found that building any new housing, especially homes subsidized for low-income residents, prevents displacement at a regional level.
But low-income renters—and, importantly, those who advocate on their behalf—weren’t buying it. Dillon says “there is a fundamental disconnect between the approach of the senator and his supporters on one side and influential anti-poverty organizations on the other.” Their fear was that new apartment construction would happen disproportionately or exclusively in lower income communities. The Brookings Institution’s Jenny Schuetz boiled this down to a trenchant tweet:
Tricky politics. Past experience shows that wealthy white communities have been more successful blocking development in their neighborhoods, so not unreasonable that lower-income [people of color] worried they’ll bear the brunt. But building more housing is only long-term solution.
Never mind that this pretty much flies in the face of the logic of real estate development: Given the choice to build apartments in a high-income community or a low-income community, developers will inevitably tend to gravitate toward the places where rents are higher so that they can earn a greater profit. The fact that high-income communities have been so adept at zoning land for single-family uses and so resistant to development proposals is the principal reason that demand has been diverted to lower-income neighborhoods in the first place. A sweeping, statewide preemption of “local control” is the only thing that’s likely to open up the opportunity to develop in these higher-income places.
Ultimately, this shows how deeply ingrained the notion of weaponizing development approvals is in the land-use process. The argument seems to be that unless low-income communities have the same power to exclude new development that wealthier communities routinely exercise, that this is inequitable. Low-income housing advocates have used withholding development permission and regulating density to extract concessions from developers in the form of community benefit agreements or construction of or financial contributions for affordable housing. This exactly parallels the way in which higher-income communities extract concessions in the form of land dedication, park construction, contributions for schools and local government, and other amenities.
As long as we view planning and development approvals as devices for extracting concessions from developers on a case-by-case basis, we’ll inevitably circle back to a low-build, NIMBY-dominated world.
This is pretty much the problem that has plagued New York’s Mandatory Inclusionary Housing program. In theory, the city’s program requires developers to dedicate a portion of units in new apartment buildings for affordable housing, which should ease the city’s supply crunch and help reduce everyone’s rent. But in practice, the individual neighborhoods in which the upzoned apartment buildings would be constructed oppose the additional density. While the citywide policy easily gained a majority of the City Council, the individual upzoning approvals that would activate the “mandatory” portions of the law have run into difficulties. In the first two projects forwarded under the law—in Manhattan and Queens—strong neighborhood opposition has prompted the local city councilor to withdraw support for the needed zone change—effectively torpedoing the projects.
In many respects, this is a reprise of the drama that doomed California Governor Jerry Brown’s 2016 proposal to exempt affordable housing construction from the state’s CEQA environmental impact review process. While that would have encouraged development, it also would have removed a valuable bargaining chip that local communities (and labor unions and environmental groups) used to extract concessions from developers. As long as development permission is organized around this highly transactional, brokered process, it’s unlikely that any group is going to cede its points of leverage. We’ll achieve equality by enabling all neighborhoods, rich and poor, to be empowered to say “not in my backyard.”
As we’ve pointed out before, there’s a particularly nasty version of the prisoner’s dilemma operating when it comes to liberalizing land-use laws. Individual communities and groups would be better off if everyone were open to allowing more housing everywhere. But they don’t trust that others won’t renege, and their community (or group) will be saddled with all the burden and impacts of additional density. As in the prisoner’s dilemma, everyone looks out for their own self-interest, which produces a result that is collectively worse for everyone. Like Sartre’s No Exit, it feels like the actors are caught in a hell of mutually conflicting objectives.
If there’s going to be a way to break this logjam, it’s probably going to have to look a lot like Senate Bill 827—a relatively simple, clear and unavoidable state preemption that applies with equal force to all communities, rich and poor. The trick will be getting everyone to agree that this is in our common interest.
This article originally appeared on CityObservatory.